Home > Technology > Crm > Hosted Vs Installed Crm Software Three Considerations On Each Side

Hosted vs. Installed CRM Software: Three Considerations on Each Side

One of the fundamental decisions an organization faces in its choice of CRM software
is whether to use an installed or hosted application. The right answer depends
on the situation, and there are important issues to consider in each case.

Hosted CRM
applications remain a minority in the CRM market, but their share
is growing. This means that the ever-widening community of CRM users is finding
both premise-based and hosted approaches to have some merit. The following
are three considerations for each approach that will help an organization determine
which might be the better fit for its situation.

Installed CRM Applications

IT Capabilities. If the organization seeks to install CRM
software, it
must be confident that it has sufficient IT capabilities to handle the installation
and ongoing support. Of course, some basic small business CRM applications
are designed to be easy to use right out of the box, but as the complexity
of the application goes up, so do the IT demands.

Flexibility of Scale. Installed applications can be sensitive
to changes in scale--that is, adding users beyond a certain number may be
cumbersome, and
some systems arent designed to go beyond certain limits. A company
which expects to remain fairly constant in size shouldnt have to worry too
much
about this.
However, a company which plans to grow from small to mid-sized, or
perhaps which experiences seasonal fluctuations in users, may find an installed
system lacks sufficient flexibility of scale.

Willingness to Commit.
Purchasing software represents a commitment--not just the cost of the
software, but
the time and trouble of installing it.
Unless
a company has enough prior experience with CRM
software to be confident
that it knows what it wants, avoiding a big upfront commitment
might be a good idea.

Hosted CRM Applications

Stability of CRM Organization. With a hosted CRM
application, the user
company trusts the CRM provider to house not just the software, but more
importantly,
the data. This means the stability of the CRM provider is an important
issue. It is worth asking how long its been around, how large it is, and
if is
it one of the companies that is picking up market share in the CRM business.

Integration
with Other Technologies. A small business CRM
application may be able to
operate as a self-contained system, but as a company grows, it may
find the need to integrate its CRM system with other technologies.
Hosted CRM systems, almost by definition, are not integrated with other
information
technology
functions at the users end, but hosted CRM providers are making an
effort to increase their compatibility.

Comfort with Security. Implicit
in the outsourcing of data storage is the outsourcing of security
for that data.
Hosted CRM proponents like to point
out that there
have not been any data security incidents to date. Fair enough,
but it is also worth remembering that hosted CRM
applications are relatively
new; most of
their history has yet to be written.

Conclusion
Clearly, this is a choice with nuances that go beyond the generalization that
hosting is primarily a small business CRM
solution. There are considerations
other than size, and an organization will make the best choice when it starts
by examining its own plans and business strategies.